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PEEC issues new and revised interpretations

Confidential client information and independence were addressed.

The AICPA Professional Ethics Executive Committee has adopted revised interpretations of the “Independence Rule” related to leases and client affiliates and a new interpretation under the “Confidential Client Information Rule” of the AICPA Code of Professional Conduct.

The revised “Leases” interpretation (ET §1.260.040) states that self-interest, familiarity, and undue influence threats to a covered member’s compliance with the “Independence Rule” (ET §1.200.001) may exist when a covered member enters into or has a lease with an attest client.

The revised interpretations also address compliance with the “Independence Rule” related to new or renegotiated leases and existing leases.

The revised “Client Affiliates” interpretation (ET §1.224.010) addresses an exception to the application of the “Independence Rule” to the affiliate of a financial statement attest client when related to the requirements of the leases interpretation under the “Independence Rule.”

A new interpretation discusses a member’s responsibilities under the “Confidential Client Information Rule” (ET §1.700.001) when a member uses a third party for a quality review of the member’s tax practice. The new interpretation, “Disclosing Information in Connection With a Quality Review” (ET §1.700.110), provides guidance on when the threat is reduced to an acceptable level.

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